2017, the year in which more will be talked about pensions

The pension fund is almost empty and there is no money left for 2017 payments. The Minister of Labor, Fátima Báñez, talked about transferring widows ‘and orphans’ pensions to general budgets, while the Secretary of Budgets, Alberto Nadal , has launched a bolder idea, such as issuing debt to cover this need, since it does not even want to hear about creating a specific tax. Whatever the final solution, the truth is that money is missing. Thus, to pass some pensions to the budget is to cheat the loner, since it would still lack funding and it is not clear where to get the 21,000 million that are needed for these pensions, even if Social Security was cleaned up …

Since the crisis began, the situation has deteriorated significantly. In 2008 there were 2.2 Social Security affiliates for each pensioner and in November 2016, the ratio deteriorated to 1.88 to 1. In these years the number of pensions has grown by 15%, while the number of affiliates has increased by 15%. Down 8.2% The gap widens and it no longer seems sufficient to continue acting solely on the expense line as before and it is time to take a serious step in financing it. The situation becomes more urgent because, while the new pensions maintain the level of benefits of the previous ones, the income to the Social Security deteriorates as a consequence of the low quality of the new jobs. So, although it is not going to be the biggest problem that the economy will have to face, it is the most painful and, surely, the one that will be most talked about in the coming months.

A group of pensioners queue at a bank office to obtain their pensions (Bloomberg / Konstantinos Tsakalidis)

Fortunately, it seems that employment will not aggravate this imbalance in the year that begins tomorrow. Experts from the 17 private institutes that the Funcas Panel meets estimate that around 400,000 jobs can be created … since the economy will grow 2.4%. Is it a lot or is it little? Look at it as you want. The GDP will grow almost one point less than in 2016 – deceleration – but we will continue to grow twice as many eurozone countries – we will approach them – well understood that the land we have to recover in Spain is higher, because the crisis affected more, like Greece, Portugal and Italy.

“The economy is going to enter strongly in 2017 and that guarantees that economic growth will continue to be around 2.5%, which is what we have to maintain in the coming years,” said an euphoric Luis de Guindos in Brussels. November. The truth is that according to the INE survey, businessmen are seeing the clearest horizon. Only 20% are pessimistic, compared to 30% two years ago. On the other hand, Randstad has communicated this week, 48% of workers are optimistic for 2017 and 73% believe that their company will have better results than in 2016. Social agents, therefore, show an acceptable degree of optimism that must be key to maintain consumption as a driver, with a growth of 2.4%, at a time when fiscal stimuli, low oil prices, higher inflation and expenses made with savings will no longer be as promising consumption as last year.

The pensions will take full prominence in 2017

Investments will continue to grow, although at a slower pace, capital goods, as a result of the slowdown in the growth of business activity. Not so in construction, where a certain recovery is expected, although it is true that it will be concentrated in specific places of geography, such as Catalonia. The real estate sector, for its part, will consolidate the recovery, as Professor García Montalvo explains on page 2 of Dinero.

Exports will continue at a good pace – 4.6% – thanks in large part to one euro that should be depreciated against the dollar as Europe will continue to buy. And although it is hard to imagine, tourism can live again an excellent year, if the 12 million foreign tourists provided since 2010 and that are growing every year – the last those of Turkey – by the situation of violence in competing countries, keep. And, seen what has been seen these last weeks, nothing indicates that it will not be like this …

If everything goes according to plan, 2017 will be the year in which we will recover the level of GDP before the crisis (if we have not recovered it already at the end of this fourth quarter), but a series of risks can not be overlooked. Draft, which must come from the outside.

The first is what will happen in the United States. Never a future president had clarified so little what is going to be his economic policy. It seems that it will increase infrastructure spending, deregulate the financial world and cut taxes, which can, in some way, affect the entire world, depending on the response of the Federal Reserve to interest rates. The forecast of three rises that are expected today could change, depending on how the events developed. And the effects it could have on the financial and currency markets would affect many countries, especially emerging indebted ones. Nor is it clear how the protectionist desire mentioned again and again by Trump will be reflected, beyond the breakdown of international treaties, or how the time bomb that involves the treatment of immigration will end. And the external geopolitical line remains – with Russia, above all – as an additional unknown that can affect economic activity. From Brexit, which Trump applauds so much, we talk on the next page.

We will spend more on gas

Another risk is oil. The agreements of OPEC and non-OPEC countries can change the trend of these years. The gurus already talk about 60 or 70 dollars a barrel price, as Barclays points to a 30% increase in 2017 and 60% in 2019. It is to see how it ends and what is the reaction of Americans who have not signed nothing and that with these prices can re-start fracking operations that at lower prices are not profitable and what can be its rebalancing effect in the market. More inflation and drag of raw materials seem safe.

And there are, of course, questions of a political nature with a direct impact on the economy. The Italian banking world, for example, will continue to give much to talk about, with probable elections throughout the year. Where they are safe is in France, Holland and Germany, in which there is nothing written …

Debt

300% of GDP . Indebtedness is the great danger. Between public and private it exceeds 300% of GDP, of which 80% is family, 130% business and the rest belongs to administrations. A minimal increase in the types would create a very difficult solution problem.

Euro

Are we going with the dollar? Since winning the Donald Trump election in the US the dollar has not done more than revalue, following the rise already made of rates and those planned, which can still give many lurches. The possibility of a euro on a par with the dollar can not be ruled out.

Prices

The CPI returns to positive zone . The rise in the price of oil and that expected in raw materials will close this strange stage of negative growth of the CPI. We can return to 2% at the close of 2017, according to Funcas, which will imply a complicated situation for saving

job

There are still two million . In the third quarter of 2007 there were 20.7 million employed. Nine years later, 18.5. True, there is recovery since 2014, but two million are still missing.